Presenters: Lisma Arshyda Puspita, Indriyana Puspitosari
Affiliation: State Islamic University Raden Mas Said Surakarta
Room: 11
ICIES News- At the 4th International Conference on Islamic Economics Studies (ICIES) 2024, Lisma Arshyda Puspita and Indriyana Puspitosari from State Islamic University Raden Mas Said Surakarta presented their study titled “The Effect of CEO Attributes and Cognitive Abilities on Aggressive Tax Avoidance: The Case of Indonesian Energy Companies Listed on the IDX.” The session, held in Room 11, explored how various CEO characteristics impact tax avoidance strategies in Indonesian energy companies.
The research aimed to understand the influence of CEO attributes and cognitive abilities on aggressive tax avoidance practices. The study focused on 58 energy sector companies listed on the Indonesia Stock Exchange (IDX) over the period 2018-2022, using a sample of 290 observations. Multiple linear regression was employed to analyze the data.
Key findings from the study include:
- CEO Tenure: The length of time a CEO has been in office was found to significantly influence aggressive tax avoidance. Longer tenure may correlate with more entrenched tax avoidance strategies.
- Accounting Expertise: CEOs with accounting expertise were found to engage more in aggressive tax avoidance practices. Their specialized knowledge enables them to navigate complex tax regulations more effectively.
- Insider Status: CEOs with insider status also demonstrated a significant relationship with aggressive tax avoidance. Their intimate knowledge of the company’s operations and financial intricacies contributes to more aggressive tax strategies.
The study sheds light on the critical role of CEO attributes in shaping corporate tax policy, especially within the context of Indonesian companies characterized by dualistic corporate governance structures. It highlights how CEO tenure, accounting expertise, and insider status can drive aggressive tax avoidance practices.
Puspita and Puspitosari’s research provides valuable insights into the relationship between CEO characteristics and tax avoidance, offering a deeper understanding of how leadership attributes influence corporate tax behavior. Their findings contribute to the broader discussion on corporate governance and tax policy, emphasizing the need for awareness regarding the impact of CEO attributes on financial and tax management practices in Indonesia.